An Eyes Wide Open Look at U.S. Manufacturing

“The fate of the U.S. economy will be decided in the next four to five years. The question is: Do we continue on the course to becoming a third-world country, importing finished goods and exporting raw materials, or will we rebuild our manufacturing base and once again become the premier industrial leader?” — Michele Nash-Hoff

Can American Manufacturing Be Saved? – Why We Should and How We Can is a dynamic new book by fellow Huffington Post blogger, Michele Nash-Hoff. I strongly recommend this book, which tosses a much-needed bucket of cold water over the annoying cheer squad of globalization. It does this simply by assuming that America, Americans, and the values we have promulgated actually matter. The author makes the audacious assertion that the standard of living in America should be the primary focus of U.S. policy, both foreign and domestic, and that this practical objective should trump all ideological delusions. Imagine that!

As the quote above illustrates, her arguments fly in the face of the current U.S. business school paradigm which seems to be: Leverage America’s R&D and capital to create great consumer products, manufactured abroad — usually China — in order to maximize shareholder return. In this mindset capital is not king, but God, bearing no allegiance to any nation, community, firm or employee. As academics, we teach our business leaders: The fate of individuals is not your concern — unless they are CEOs or stockholders — as competing with third-world wages and standards will actually do them good. In this curriculum the only thing that matters is getting the biggest number on the left side of the equation next quarter, even if the ironic long-term consequences of this short term thinking may be the subjugation of the capitalist system that created it to a foreign and avowedly communist regime.

Let me be clear that Can American Manufacturing Be Saved? is no emotional, xenophobic rant against trade. Nash-Hoff views trade as a tough playing field that Americans used to rule and can win on again. The book starts with a gritty history of U.S. manufacturing and its associated politics. It accepts no sacred cows as it turns over all the rocks and exposes the good, bad and ugly in four centuries of American industry, unions, and politicians. The author happily skewers the intransigent labor leaders, complicit managers, and naïve politicians of the last century who guided American manufacturing into a period of ludicrous union contracts and built our Kafkaesque regulatory environment.

That said, Nash-Hoff is quick to remind cynics that just because the pendulum may have swung too far, it doesn’t mean that we want to be living in the 19th century again either:

“It is important for Americans to remember that unions can be credited with the end of child labor, improved worker safety, increased wages for both union and non-union workers, reduction in the work day from more than 10 hours to eight, and the raising of our entire society’s standard of living. In essence, unions raised the lower class of workers up into the middle class.”

In the end does all this really matter? Does it matter to anyone besides a handful of rust-belt union members or a few quaint little manufacturers of novelty “Made in U.S.A.” products, living off the gullibility of avid American nationalists? Nash-Hoff would answer with a resounding, “Yes, it really does matter to us all.” It matters at the personal level as the author reminds us in Chapter 4:

“Jobs paying the $20 per hour that historically enabled American wage earners to support a middle-class standard of living are leaving the U.S. Only 16 percent of today’s workers earn the $20 per hour baseline wage, down 60 percent since 1979.”

It also matters at the national level as Nash-Hoff states in Chapter 6:

“Manufacturing is the foundation of the U.S. economy and our country’s large middle class. Losing the critical mass of our manufacturing base would result in larger state and federal budget deficits and a decline in U.S. living standards. This, in turn, would result in the loss of the large portion of our middle class, which depends on manufacturing jobs. America’s national defense would be in danger and it would be impossible to maintain the country’s position as a superpower.”

What can we do about the current disaster? Nash-Hoff tells us we need to roll up our sleeves and get to work at the policy level so Americans can get back to work on the factory floor:

“Well, Americans now need to get as “mad as hell” about bad trade laws, bad tax laws, and over-burdensome regulations on manufacturers. It’s time to become engaged in a grassroots fight to change the bad free-trade laws into better fair-trade laws that will reflect the interests of small manufacturers who’ve been absent from trade policy deliberations for far too long.”

Is anything being done? Nash-Hoff ‘s book suggests the tide may be turning. She details a number of promising policy proposals and new signs of manufacturing success across the country, from the broad Reshoring Initiative to specific innovative programs taking root right now at the state and local level in Indiana. Chapter 10 even details some of the specific innovative strategies firms are using to compete on an uneven global playing field. However, the author does not own a pair of rose-tinted glasses and she bluntly warns us that small firms cannot compete against an assault by a huge foreign government if Washington stands idly by:

“A manufacturer can apply all of the recommendations in this chapter and still fail because of circumstances and outside factors beyond its control. Very few American manufacturers can survive when their industry has been targeted by China for product dumping.”

Frankly, Nash-Hoff is right. We’ve got a big problem and it needs to be fixed and it won’t be improved with more obdurate, partisan bickering. We need to check our ideologies at the door, be unmercifully honest about the nature of our competitors, and be willing to undo some of the things we thought we loved. If you care about America, your neighbors and our children’s future and you are willing to approach all that with eyes wide open, then you need to read this book. When you are done with it, I would encourage you to mail it to your congressperson.